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A Look Back at Traditional Fast Food Stocks' Q1 Earnings: Yum! Brands (NYSE:YUM) Vs The Rest Of The Pack


Adam Hejl /
2024/07/11 7:49 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Yum! Brands (NYSE:YUM) and its peers.

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

The 14 traditional fast food stocks we track reported a decent Q1; on average, revenues were in line with analyst consensus estimates. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and traditional fast food stocks have had a rough stretch, with share prices down 8.6% on average since the previous earnings results.

Yum! Brands (NYSE:YUM)

Spun off as an independent company from PepsiCo, Yum! Brands (NYSE:YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.

Yum! Brands reported revenues of $1.60 billion, down 2.9% year on year, falling short of analysts' expectations by 6.6%. It was a mixed quarter for the company with an impressive beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.

Yum! Brands Total Revenue

Yum! Brands delivered the weakest performance against analyst estimates of the whole group. The stock is down 8.6% since reporting and currently trades at $129.16.

Is now the time to buy Yum! Brands? Access our full analysis of the earnings results here, it's free.

Best Q1: El Pollo Loco (NASDAQ:LOCO)

With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ:LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.

El Pollo Loco reported revenues of $116.2 million, up 1.4% year on year, outperforming analysts' expectations by 4.6%. It was an incredible quarter for the company with an impressive beat of analysts' earnings and gross margin estimates.

El Pollo Loco Total Revenue

The market seems happy with the results as the stock is up 27.2% since reporting. It currently trades at $10.93.

Is now the time to buy El Pollo Loco? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Starbucks (NASDAQ:SBUX)

Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ:SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.

Starbucks reported revenues of $8.56 billion, down 1.8% year on year, falling short of analysts' expectations by 6.5%. It was a weak quarter for the company with a miss of analysts' gross margin estimates and a miss of analysts' earnings estimates.

As expected, the stock is down 18% since the results and currently trades at $72.61.

Read our full analysis of Starbucks's results here.

Wendy's (NASDAQ:WEN)

Founded by Dave Thomas in 1969, Wendy’s (NASDAQ:WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.

Wendy's reported revenues of $534.8 million, up 1.1% year on year, falling short of analysts' expectations by 1.1%. Looking more broadly, it was a solid quarter for the company with an impressive beat of analysts' gross margin estimates and a decent beat of analysts' earnings estimates.

The stock is down 19% since reporting and currently trades at $15.91.

Read our full, actionable report on Wendy's here, it's free.

Dutch Bros (NYSE:BROS)

Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE:BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.

Dutch Bros reported revenues of $275.1 million, up 39.5% year on year, surpassing analysts' expectations by 7.6%. Looking more broadly, it was a very strong quarter for the company with an impressive beat of analysts' earnings estimates and a solid beat of analysts' gross margin estimates.

Dutch Bros delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 39% since reporting and currently trades at $39.52.

Read our full, actionable report on Dutch Bros here, it's free.

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